Elon reveals Cybertruck details / production expectations on Q3 2023 call

[HaulingAss]

It is possible they were testing the machining process.. They may be good,(I think they are) , but they may be scrap.

You have been swayed by idiots who think those castings are scrap. Any thinking person knows they are not scrap, that's not how scrap is piled, and that's just one reason in a very long list of good reasons why they are not scrap. They could become scrap at some point, if Tesla makes a major change to the castings, but they were not placed there intended as scrap.

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[Nolacyber]

The argument they should start high and reduce the price later when they're ramped would cause lots of reservations to cancel, and then upset those early buyers as their trucks are devalued by Tesla.

It's the road to less profit.

-Crissa

If I were Elon I wouldn’t be worried about the fanboys cancelling their $100 investment in the Cybertruck. Reservations north of 1 million for a vehicle that after ramp will produce 250k a year is meaningless.
I didn’t understand the absurdly low pricing at the 2019 reveal. Have a look at current F 250 pricing. Don’t think you’ll get out the door under 75k. Lightning would be more. Why price under those numbers?

 

[CYBRSMTH]

For your information, Tesla's 3rd Qtr. automotive margins are not 8%, they 17.8% (IIRC), the highest in the industry (of high-volume automakers). Amazingly, it's done with all EV's! No other automaker makes high margins on EVs, most lose money on every EV they sell.

The 8% figure you refer to are the net margins of the entire company. This includes expenses like building out their worldwide Supercharger Network (costs other automakers don't have), development costs of Optimus (humanoid robot), corporate overhead, construction and expansion of new factories, corporate taxes, etc. And here's the big one, Tesla is growing production while the rest are shrinking. That means Tesla is investing massively in future profits and all that comes at a high price to their overall net margins. The fact that it's a positive 8% is astounding!

In other words, it's a very misleading thing to quote in the context you quoted it. I have to assume it's because you read mainstream media articles that are purposefully designed to be misleading (without actually saying anything untrue). I'm not exaggerating here, most stories are the opposite of informational, because they are designed to mislead. And it looks like it still works to a degree.

Geesh. Maybe I misunderstood the margins of the entire company vs. each vehicle, but during the earnings call they said that it costs $37,500 to build a Tesla. I’m not sure if this is an average or what, but currently a Standard Range Model 3 costs $38,990. That’s a profit margin of about 4%. And a Model Y Standard Range costs $43,990. That’s a profit margin of about 8%.

Again, I don’t know if the $37,500 amount they quoted was an average because then they’d be making 100% profit on a Model S and over 100% profit for the Model X and that doesn’t sound right. The Model X is significantly larger than the Model 3, has a larger battery pack, gull-wing doors, etc. and wouldn’t have the same cost to manufacture. It’s a harder more expensive vehicle to build. Just like the CyberTruck will be a harder more expensive vehicle to build.

 

[cvalue13]

For your information, Tesla's 3rd Qtr. automotive margins are not 8%, they 17.8% (IIRC), the highest in the industry (of high-volume automakers). Amazingly, it's done with all EV's! No other automaker makes high margins on EVs, most lose money on every EV they sell.

this claptrap again?!

First, 17% was their margin in Q3 of 2022. In 2023, their margin was 7.6%

Second, comparing apples-to-apples, Trsla and traditional autos can’t be compared 1-1 because their business models and life-stage are so drastically different.

Third, and to double-click on the ones above: centrally, Tesla’s “margins” are end-to-end (manufacturing to customer sale) whereas traditional OEM’s are wholesalers - who effectively give a material portion of their “margin” to dealers in exchange for dealers taking on retail risk/OpEx

So going back to the first point: that’s Tesla’s end-to-end margin is only 7.6% this year is WILD. That’s lower than several traditional OEMs, DESPITE traditionals handing over unrealized margin to dealer model.

Here’s the thing about all this half-baked fanboi financials from the sidelines: they’ve been in the golden years of comparing apples-to-oranges, and making one-another believe they’re saying anything meaningful.

Tesla is only now beginning to transition from an orange to an apple, and how that transition goes will be the beginning of the first time ever such comparisons remotely begin to make sense.

Musk JUST told y’all “it’s not possible to have 50% compound growth rate forever,” and some of y’all just gloss right over how that’s been true of many OEMs for decades.

I think there’s a lot to say about Tesla’s business strengths.

which only makes it that much more wild y’all don’t even manage to touch on those things, so bogged down in half-baked financials myths

 

[Bill837]

They could sell the first 50,000 for $100,000 and it would still be at a loss because the huge sunk cost of buying this land and building a huge factory. I was encouraged to hear Elon mention the losses. That is a reality of almost all new products and is a sobering fact for investors to accept. But it means we will probably see realistic pricing. You are definitely right in that if they set the starting price too high they will have a lot of bad publicity and lose a lot of the reservation holders just out of bad faith. The truth is that they could probably sell every one of the first 50,000 for $100k and then drop the price to a realistic number and they would still likely sell every vehicle that they can produce, which is limited to about 250k annually with their current gigapress capacity.

If they hit a sweet spot with pricing and durability, they will infiltrate the work truck and fleet markets and they will have huge success. If this stays in a pricey Rivian posh camping guys niche then it will be hard for them to break out. like the Model X and S. But i think Tesal wanted the X and S in that category previously and couldnt handle ramping those products too much. I dont see them building massive factories for the X and S like they are for the CT so clearly the CT is meant for a much much higher volume.

I think 2025 and 2026 will be the years of the CT. The reality of forced recession will have set in to manufacturers and the result of a slowing economy will drive material pricing down, wages will have stagnated so demand will be a little lower and the CT assembly line will be a well oiled machine cranking them out at close to 250k per year. I have an early reservation but I might wait depending on what the initial pricing is. I have been holding $65k in my mind.

I just want to point out real fast. The land and the factory were built to do far more than just cyber truck. There's an entire battery and pack assembly plant in there also. Oh and one maybe two model y production lines. And also space for roadster production. Let's not forget that. There's also a cathode production plant on the property and a few other things like a crash test lab

 

[Crissa]

If I were Elon I wouldn’t be worried about the fanboys cancelling their $100 investment in the Cybertruck. Reservations north of 1 million for a vehicle that after ramp will produce 250k a year is meaningless.
I didn’t understand the absurdly low pricing at the 2019 reveal. Have a look at current F 250 pricing. Don’t think you’ll get out the door under 75k. Lightning would be more. Why price under those numbers?

It won't be fanboys who cancel their orders. First impressions are hard to break - and why Tesla right now can't shake the impression its cars are 'expensive'.

I don't understand how you don't understand prices that are designed to convert the industry to BEVs.

-Crissa

 

[rudedawg78]

I’ve been telling everyone this for months. Listen to Elon. It’s going to be a rough go at first. They’re counting on early adopters to pay for the privilege of driving the CT.

I believe you both are wrong. The amount of times that Elon stated that we have to make the Cybertruck affordable implies that it WON'T be expensive. He said that at least half a dozen times!

Additionally, he stated to investors that there will be a loss in the first year while they ramp up production and create more efficiencies. What I take from that is that they will make the truck affordable, even with a loss.

 

[cvalue13]

I believe you both are wrong. The amount of times that Elon stated that we have to make the Cybertruck affordable implies that it WON'T be expensive. He said that at least half a dozen times!

Additionally, he stated to investors that there will be a loss in the first year while they ramp up production and create more efficiencies. What I take from that is that they will make the truck affordable, even with a loss.

I tend to agree

read one way, Musk is saying the Lightning specs are in line, but the price is the problem



so if Tesla releases a dual with specs in line with the Lightning LR - as ~previewed in 2019

price is the difference-maker

On that view, question remains whether there’s an embedded upcharge for the CTs “technology bandwagon”

 

[Arctic_White]

this claptrap again?!

First, 17% was their margin in Q3 of 2022. In 2023, their margin was 7.6%

Second, comparing apples-to-apples, Trsla and traditional autos can’t be compared 1-1 because their business models and life-stage are so drastically different.

Third, and to double-click on the ones above: centrally, Tesla’s “margins” are end-to-end (manufacturing to customer sale) whereas traditional OEM’s are wholesalers - who effectively give a material portion of their “margin” to dealers in exchange for dealers taking on retail risk/OpEx

So going back to the first point: that’s Tesla’s end-to-end margin is only 7.6% this year is WILD. That’s lower than several traditional OEMs, DESPITE traditionals handing over unrealized margin to dealer model.

Here’s the thing about all this half-baked fanboi financials from the sidelines: they’ve been in the golden years of comparing apples-to-oranges, and making one-another believe they’re saying anything meaningful.

Tesla is only now beginning to transition from an orange to an apple, and how that transition goes will be the beginning of the first time ever such comparisons remotely begin to make sense.

Musk JUST told y’all “it’s not possible to have 50% compound growth rate forever,” and some of y’all just gloss right over how that’s been true of many OEMs for decades.

I think there’s a lot to say about Tesla’s business strengths.

which only makes it that much more wild y’all don’t even manage to touch on those things, so bogged down in half-baked financials myths

LOL. So many mistakes and I don’t even know where to start.

Your first mistake is comparing Tesla with the regular automaker. You’re failing to account for Tesla’s $3B worth of expenses that impact net margin directly, and they are all to do with solving autonomy.

Not to mention countless other money being spent to ramp up supercharging locations, to create new service centres, etc.

Tesla is still a growing company. The fact that Tesla continues to grow while having positive free cash flow is mind-boggling to me.

If you take out all of these expenses, Tesla’s gross and net margins is vastly, VASTLY superior to that of any automaker.

I suggest looking at their actual financial statements and reach out to me if you have any general or specific question.

 

[HaulingAss]

Geesh. Maybe I misunderstood the margins of the entire company vs. each vehicle, but during the earnings call they said that it costs $37,500 to build a Tesla. I’m not sure if this is an average or what, but currently a Standard Range Model 3 costs $38,990. That’s a profit margin of about 4%. And a Model Y Standard Range costs $43,990. That’s a profit margin of about 8%.

Again, I don’t know if the $37,500 amount they quoted was an average because then they’d be making 100% profit on a Model S and over 100% profit for the Model X and that doesn’t sound right. The Model X is significantly larger than the Model 3, has a larger battery pack, gull-wing doors, etc. and wouldn’t have the same cost to manufacture. It’s a harder more expensive vehicle to build. Just like the CyberTruck will be a harder more expensive vehicle to build.

You're not making any sense. Obviously, the $37,500 is the average cost to build each car they produced in Q3. The Model 3 and Model Y will obviously come in below that, and the Model X and Model S come in above it, but the latter two models sell in tiny volume relative to the 3 & Y and don't move the needle as much. I assume you know what average means, which is why I'm having trouble understanding what you are trying to say.

Tesla's automotive net margins are 17.8% in Q3, and that averages all of their models too, and is how automotive net margins are calculated for all automakers.

Tesla is the most efficient auto manufacturer, which is how they can offer new car buyers so much better value while making a good profit. They don't have to sell them at a high price while losing money on everyone they sell, like just about every other EV maker is forced to do.

 

[cvalue13]

You’re failing to account for Tesla’s $3B worth of expenses that impact net margin directly, and they are all to do with solving autonomy.

funny, don’t remember you keeping that in mind when speaking of Ford’s margins

ford’s spent more in R&D each of the last 10 years than Tesla has in the last 10 years of its existence

meanwhile, all but the prior two years Tesla has made any net profit only in virtue of selling Bitcoin and carbon credits - then this quarter it’s profits go down 44%

but “making an auto company is hard work”

none of which is to say anything more or less than how quickly they come running to the relevant facts when they need them

hypocracy is the homage vice pays to virtue

I suggest looking at their actual financial statements and reach out to me if you have any general or specific question.

sure

explain to me why Tesla calculates it’s margins AFTER backing out all OpEx for it’s distribution/dealer arms?

and if it didn’t, what it’s margins would be then

I’ll wait

“so much wrong I don’t know where to start” then all you say is “developing new cars and infrastructure to expand capacity and markets is expensive” - as though that has any unique relevance to Tesla

give me a break ?

 

[HaulingAss]

If I were Elon I wouldn’t be worried about the fanboys cancelling their $100 investment in the Cybertruck. Reservations north of 1 million for a vehicle that after ramp will produce 250k a year is meaningless.
I didn’t understand the absurdly low pricing at the 2019 reveal. Have a look at current F 250 pricing. Don’t think you’ll get out the door under 75k. Lightning would be more. Why price under those numbers?

The Ford Lightning (and the F-250) cannot sell in greater volumes at current prices. They are priced high because Ford is insanely inefficient at manufacturing when compared to Tesla. When you have to price that high (for what you get) it's a given that you cannot keep expanding production and sales. F-series trucks have been gradually falling in sales for years if you apply a little smoothing to the sales numbers to take out shocks to the system like COVID.

Tesla wants to price the Cybertruck low (for what you get)so they can ramp production higher every year until they are selling huge volumes. That requires figuring out how to build them for a low price (without cheapening them up and making them undesirable, even at a low price).

Tesla has a huge pool of reservations and everyone that reserved before they removed pricing and ranges deserves to pay the same price because they are all in the same pool of early reservations. It would look pretty bad if Tesla tried to soak it to the early deliveries and lower the lower the price to scoop up more sales from the same reservation pool.

Even though the Cybertruck will offer the most value in the EV truck market, there will still be plenty of people who cancel their reservations because they are not ready to buy a new truck when their number comes up. That's just a given and the reasons will run the gamut, from high interest rates, to inflation, to loss of job, to medical bills, to a change of heart.

But here's the thing, the new reservations will almost certainly outnumber cancellations, just like they did on the Model 3.

 

[Arctic_White]

funny, don’t remember you keeping that in mind when speaking of Ford’s margins

ford’s spent more in R&D each of the last 10 years than Tesla has in the last 10 years of its existence

meanwhile, all but the prior two years Tesla has made any net profit only in virtue of selling Bitcoin and carbon credits - then this quarter it’s profits go down 44%

but “making an auto company is hard work”

none of which is to say anything more or less than how quickly they come running to the relevant facts when they need them

hypocracy is the homage vice pays to virtue



sure

explain to me why Tesla calculates it’s margins AFTER backing out all OpEx for it’s distribution/dealer arms?

and if it didn’t, what it’s margins would be then

I’ll wait

“so much wrong I don’t know where to start” then all you say is “developing new cars and infrastructure to expand capacity and markets is expensive” - as though that has any unique relevance to Tesla

give me a break ?

Lost in all of your arguments is the fact that Tesla still remains the only EV company that makes any money selling its EVs.

Look at Ford who at least has the guts to show how much they lose in each EV they make.

My point is that you're comparing Tesla's net income with Ford which is incorrect because Ford is not working on AGI, or solving autonomy. Nor does Ford have any energy business.

You're being blinded, which isn't surprising because it is so easy to fall victim to the narrative!

I will also mention this: because Tesla sells directly to the consumer, we get the pricing information and the "hit" to financials right away. With the legacy automakers, this hit is delayed by a quarter or two, as they "sell" every car they make to the dealer.

 

[Arctic_White]

funny, don’t remember you keeping that in mind when speaking of Ford’s margins

ford’s spent more in R&D each of the last 10 years than Tesla has in the last 10 years of its existence

meanwhile, all but the prior two years Tesla has made any net profit only in virtue of selling Bitcoin and carbon credits - then this quarter it’s profits go down 44%

but “making an auto company is hard work”

none of which is to say anything more or less than how quickly they come running to the relevant facts when they need them

hypocracy is the homage vice pays to virtue



sure

explain to me why Tesla calculates it’s margins AFTER backing out all OpEx for it’s distribution/dealer arms?

and if it didn’t, what it’s margins would be then

I’ll wait

“so much wrong I don’t know where to start” then all you say is “developing new cars and infrastructure to expand capacity and markets is expensive” - as though that has any unique relevance to Tesla

give me a break ?

Few questions for you to ask yourself:

1) Which car company is still growing?
2) Which car company has the best outlook?
3) Which car company has the ability to reduce its price while still maintaining profit?

If you think Tesla is struggling, then the remaining automakers are hurting bad. It's just that they have ICE vehicles that will carry them forward, but once that gravy train is done, watch out.

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